28/08/2020

MÔN HỌC TIẾNG ANH NGÀNH BẢO HIỂM

Số tín chỉ: 03
Bộ môn Kinh tế bảo hiểm
Khoa Bảo hiểm

Thông tin về giảng viên

Giảng viên:
Bộ môn Kinh tế bảo hiểm – Khoa bảo hiểm
P102 - 103, Nhà 6B, Trường ĐH Kinh tế Quốc dân,
Website: https://khoabaohiem.neu.edu.vn/
Email của giảng viên:
SĐT của giảng viên:

Chapter 4. Insurance Business

Mục tiêu của chương: Chương 4 đi sâu cung cấp cho sinh viên
các kiến thức về kinh doanh bảo hiểm trong Tiếng Anh.

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Terms in commercial insurance

 Policyowner : chủ đơn  Death benefits: q.lợi tử vong

 Policyholder : người được BH
 Sum insured: Số tiền BH
 Cash Value : giá trị tiền mặt
 Surrender value: giá trị giải ước
 Lapse rate : tỉ lệ huỷ bỏ hđ
 Grace period : thời gian ân hạn
 Single premium: phí 1 lần
 Level premium : phí không đổi
 Insurable event: Sự kiện có thể BH
 Dividends : lợi nhuận hợp đồng
 Renewability : Có thể tái tục
 Convertibility : Có thể chuyển đổi
 Death benefit pattern: đồ thị q. lợi
t.vong
 Mortality rate : Tỉ lệ tử vong
 Mortality table : bảng tỉ lệ tử vong
 Underwriting: Khai thác bảo hiểm

Operations of insurance company

Rate making Underwriting

Investment Production

Claim settlement
Reinsurance

Rate making

Rate making refers to the pricing of insurance and

the calculation of insurance premiums.
 Total premiums charged must be adequate for
paying all claims and expenses during the policy
period
 Rates and premiums are determined by an actuary,
using the company’s past loss experience and
industry statistics

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Underwriting
Underwriting refers to the process of selecting,
classifying, and pricing applicants for insurance. There
are three important principles:
 The underwriter must select prospective insureds
according to the company’s underwriting standards
 Attain an underwriting profit
 Underwriting should maintain equity among the
policyholders

Production

Production refers to the sales and marketing activities

of insurers
 Agents are often referred to as producers
 Life insurers have sales departments
 Property and liability insurers have marketing
departments

Claim settlement
The claim process begins with a notice of loss
Next, the claim is investigated
A claims adjustor determines if a covered loss has occurred
and the amount of the loss
The adjustor may require a proof of loss before the claim is
paid
The adjustor decides if the claim should be paid or
denied
Policy provisions address how disputes may be resolved

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Reinsurance
Reinsurance is an arrangement by which the primary
insurer that initially writes the insurance transfers to
another insurer part or all of the potential losses
associated with such insurance
 The primary insurer is the ceding company
 The insurer that accepts the insurance from the ceding
company is the reinsurer
 The retention limit is the amount of insurance retained by
the ceding company
 The amount of insurance ceded to the reinsurer is known as
a cession

Investment

 Because premiums are paid in advance, they can be invested

until needed to pay claims and expenses
 Investment income is extremely important in reducing the
premiums and offsetting unfavorable underwriting
experience
 Life insurance contracts are long-term; thus, life insurance
companies tend to invest in long-term assets
 In contrast to life insurance, none-life insurance contracts
are short-term in nature, non-life insurance companies tend
to invest in short-term assets.

Non – life insurance

Principles apply in general insurance:

Indemnity
Subrogation
Contribution

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Indemnity

There is a link between indemnity and

insurable interest
Indemnity - for the purposes of insurance
contracts, may be looked on as exact financial
position after a loss as immediately before it
occurred.

Indemnity

Indemnity

Franchise: Is designed to cater for certain small

losses. Once the franchise has been exceeded, the
claim is payable in full.
Excess : Is an amount of each and every claim
which is not covered by the policy. The amount of
the excess is deducted from each and every claim.
Deductible: Is the name given to a very large excess
Limits (mức giới hạn): Many policies limit the
amount paid for certain events

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Subrogation

When the insured is compensated for the losses due

to damage to his insured property, then the
ownership right of such property shifts to the
insurer.
Applies when there is a third party, who make losses

Contribution
 If the insured take out more than one policy on the
same subject matter, the insured will claim the
compensation only to the extent of actual loss either
from all insurers or from any one insurer
The basis of contribution: ratable proportion
There are several requirements before contribution will
arise:
 Two or more policies of indemnity must exist;
 The policies must cover a common peril which gives rise to the
loss
 The policies must cover a common subject matter;
 Each policy must be liable for the loss.

Life insurance

Life insurance is insuring for life of insured.

Life insurance relates to the “live” or “death” of
insured - two contrary events.
Insure > < Assure
Indemnity > < pay/compensate
No subrogation and contribution

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The need of life insurance

There are two basic needs:

Economic protection in case of premature death
Financial income support to the survivors
Furthermore, in some products, clients purchase the
life insurance to:
Raise educational fund for their children
Raise fund for business organization
Repay loans raised by the deceased breadwinner

Term insurance

Term insurance are effected solely to insure against

the possibility of death occurring within a time
specified in the contract. If death does not occur
during that period, no payment is made and the
assured does not receive any return from his
premiums.
=>the premiums may be kept at a very modest level.

Term insurance

 Level term assurance

 Renewable term assurance
 Convertible term assurance
 Decreasing term assurance
 Increasing term assurance

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Permanent life insurance

Permanent life insurance covers the remaining

lifetime of the assured. The sum assured is payable
on the death of the life assured.
=>since they are long-term contracts, there is an
investment element and at some stage the policy is
bound to pay.
=>the surrender value
=>non-profit and with-profit (dividends)

Life annuity

 A person entering into an life annuity contract

agrees to pay a specified sum of capital lump sum or
by installment to the insurer. The insurer in return
promises to pay the insured a lump sum or a series
of payments until insured's death.
Generally, life annuity is opted by a person who
wants to use the money after his retirement.

Endowment

Endowments are issued for a fixed term. The sum

assured is payable on completion of the selected
terms (called maturity) or death, if earlier.
Premiums on endowments are higher than for
permanent life insurance since their maturity is set
up. Hence, the majority of claims would be made
earlier and would have a shorter period to collect
and invest premiums.

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Endowment

A endowment policy is also a form of financial

saving, whereby if the assured remains living
beyond the tenure of the policy, he gets back the
sum assured with some other investment benefits.
Combining risk cover with financial savings,
endowment policies is the most popular policies in
the world of life insurance.

Coinsurance

Coinsurance is a method of sharing large property

risks.
For example, a petro-chemical plants are valued at
approximately 500 million of dollars. It is clearly
that most insurers do not want to retain $1 million
for their own account. Hence, several insurers would
be involved.

Reinsurance
In reinsurance, the insurers insure the large property
risk again. They themselves seek insurance protection.
The reason for by reinsurance:
 Security
 Stability in claim costs
 Capacity: financial limit on the size of risk that can be
accepted
 Catastrophes
 Macro benefits: the impact of risk does not fall solely on
one economy

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Types of reinsurance
 Legal types:
Obligatory (treaty) reinsurance provides automatic protection
to a pre-agreed book of underlying insurance contracts.
Facultative contracts are placed on a risk-by-risk basis and are
typically individually underwritten by reinsurers.
 Technical types:
In the Proportional contract, the reinsurer agrees to bear a
fixed proportion of any losses arising, in exchange for a fixed
proportion of the premium.
Under a Non-Proportional contract, the reinsurer agrees to
meet any losses above a pre-agreed level, in return for a fixed
premium, not anymore proportional.

Chapter 4

 Terms in commercial insurance

 Operations of insurance company
 Types of commercial insurance
 Reinsurance and coinsurance

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